Moody’s ups Global Brass to Ba3

Moody's Investors Service said it upgraded Global Brass and Copper, Inc.'s corporate family rating to Ba3 from B1 and probability of default rating to Ba3-PD from B1-PD because it expects continuing improvement in operating performance and resulting key debt credits metrics that warrant the upgrade.

In related actions, the agency upgraded company's speculative grade liquidity rating to SGL-1 from SGL-2 and assigned a B1 rating to its proposed $315 million senior secured term loan due 2025.

Proceeds from proposed term loan will be used to repay Global Brass’ existing B2 senior secured term loan due 2023, at which time the rating will be withdrawn. Terms and conditions for proposed debt will be similar to those in existing term loan.

The outlook is stable.

Moody’s said the upgrade results from stable operating margins, diverse end markets and very good liquidity profile.

The agency projects EBITA margins remaining in 6% range over next 12 to 18 months, debt leverage near 2.4 times by late 2019 and free cash flow-debt approaching 15% over same time period (all ratios incorporate Moody's standard adjustments).

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